Simex International (Manila), Inc. vs.

CA and Traders Royal

Bank
A bank is under obligation to treat the accounts of its depositors with meticulous
care, always having in mind the fiduciary nature of their relationship.
FACTS:
Simex International is a private corporation engaged in the exportation of food
products. It buys these products from local suppliers and then sells them abroad.
Most of its exports are being purchased on credit. Simex is a depositor of Traders
Royal Bank and maintained a checking account in one of the banks branches.
Sometime in 1981 Simex deposited P100,000 in the said bank thus increasing its
balance to P190,380.74. Subsequently, Simex issued several checks against its
deposit but it was surprised as they had been dishonored due to insufficiency of
funds.
As a consequence of the dishonored checks the California Manufacturing
Corporation (CMC) sent a letter of demand to Simex with a threat of prosecution
should Simex fail to make the issued check good. CMC also withheld the delivery of
Simexs orders. Similar letters were also sent by other creditors of Simex. Simex
complained to Traders Royal Bank. In the investigation it was found out that the
P100,000 deposit had not been credited on time hence the dishonouring of the
checks. The error was rectified only on a later date and the dishonored checks were
paid after they were re-deposited.
Simex wrote a letter to Traders Royal Bank demanding reparation for the latters
gross and wanton negligence. The demand was not met and as a consequence
Simex filed a complaint in the CFI of Rizal claiming moral
1
and exemplary
2
damages.
The court held that the claim for moral and exemplary damages were not called for
under the circumstances so it instead awarded nominal damages.
ISSUE:
Whether or not Simex International should be awarded moral and exemplary
damages.
HELD:
YES. Appealed judgment MODIFIED. Private respondent is ordered to pay the
petitioner in lieu of nominal damages, moral damages in the amount of P20,000
and exemplary damages in the amount of P50,000.

1
P1,000,000
2
P500,000
The banking system is an indispensable institution in the modern world and plays a
vital role in the economic life of every civilized nation. Whether as mere passive
entities for the safekeeping and saving of money or as active instruments of
business and commerce, banks have become an ubiquitous presence among the
people, who have come to regard them with respect and even gratitude and, most
of all, confidence. In every case, the depositor expects the bank to treat his account
with the utmost fidelity, whether such account consists only of a few hundred pesos
or of millions. The bank must record every single transaction accurately, down to
the last centavo, and as promptly as possible. This has to be done if the account is
to reflect at any given time the amount of money the depositor can dispose of as he
sees fit, confident that the bank will deliver it as and to whomever he directs.
The point is that as a business affected with public interest and because of the
nature of its functions, the bank is under obligation to treat the accounts of its
depositors with meticulous care, always having in mind the fiduciary nature of their
relationship. In the case at bar, it is obvious that the respondent bank was remiss in
that duty and violated that relationship. What is especially deplorable is that,
having been informed of its error in not crediting the deposit in question to the
petitioner, the bank did not immediately correct it but did so only one week later or
23 days after the deposit was made. It bears repeating that the record does not
contain any satisfactory explanation of why the error was made in the first place
and why it was not corrected immediately after its discovery. Such ineptness comes
under the concept of the wanton manner contemplated in the Civil Code that calls
for the imposition of exemplary damages.